US economic growth slowed in fourth quarter of 2025 amid government shutdown

Economic Growth Overview - US economic growth slowed more than expected in the fourth quarter, with GDP increasing at a 1.4% annualized rate compared to a forecasted 3.0% [2][3] - The economy had previously grown at a 4.4% pace in the third quarter [3] Impact of Government Shutdown - The nonpartisan Congressional Budget Office (CBO) estimated that the government shutdown would subtract 1.5 percentage points from fourth-quarter GDP due to reduced federal services and spending [3] - The CBO projected that most of the lost output would eventually be recovered, although between $7 billion and $14 billion would not [3] Consumer Spending Trends - Consumer spending growth slowed from a brisk 3.5% pace in the third quarter, largely driven by higher-income households, impacting overall savings as inflation eroded buying power [5] - Only 181,000 jobs were added last year, the fewest since the 2009 Great Recession, indicating a jobless economic expansion [5][4] Future Economic Support - Tax cuts and anticipated larger tax refunds are expected to provide a tailwind for consumer spending this year [6] - Investment in artificial intelligence, including datacenters and semiconductors, accounted for a third of GDP growth in the first three quarters of 2025, helping to mitigate the impact of tariffs and reduced immigration [6]